QUARTERLY ACTIVITIES REPORT TO 30 SEPTEMBER 2018
ASX Announcement 31 October 2018
HIGHLIGHTS
- Feasibility Study completed for the initial Stage 1 start-up operations at flagship Bunyu Graphite Project in Tanzania – key outcomes include:
- Stage 1 based on a mining and processing plant annual throughput rate of 400,000 tonnes to produce 20,000 to 24,000tpa of graphite products
- Average FOB operating cost of US$658 per tonne and start-up capital cost estimate of US$31.6M
- Pre-tax NPV10 of US$19.5M
- Pre-tax IRR of 21.6%
- EBITDA of US$94.5M over 7-year project life
- Key approvals granted during the quarter for Stage 1 and 2 developments at Bunyu:
- Environmental and Social Impact Statement approved
- Mining Licences for Bunyu secured post-quarter end
- Binding offtake agreement signed with major Chinese graphite company Qingdao Tiangshengda Graphite for 9,000 tpa of Bunyu product over five years
- Amended prospectus for the US$40 million Tanzanian Note Issue lodged with the Tanzanian Capital Markets and Securities Authority (CMSA) and the Dar es Salaam Stock Exchange (DSE) – note issue process advancing
Volt Resources Limited (ASX: VRC) (“Volt” or, the “Company”) is pleased to provide shareholders with its quarterly activities report for the period ended 30 September 2018.
September Quarter Activities Review
Stage 1 Feasibility Study Completed
During the quarter, the Company completed the Feasibility Study (“FS”) into the Stage 1 development of the flagship Bunyu Graphite Project (“Bunyu”) located in Tanzania.
The Stage 1 development is focussed on the development of a 20,000 to 24,000tpa graphite mine and processing facility in Tanzania with exports of graphite products planned into the USA, China and other markets.
The development incorporates a significant amount of infrastructure, utilities and mine development work that will deliver significant benefits to the Stage 2 expansion including the site access road, plant laydown area, tailings storage facility, waste dumps, stockpile areas, open pit development and mining, accommodation village and water supply.
The proposed Stage 2 development is an expansion of Stage 1 production based on the market demand for Bunyu’s graphite products and leveraging the large-scale graphite mineral resource and Bunyu’s close proximity to critical infrastructure. Stage 2 is targeted to meet expected significant increases in demand for coarse flake graphite in the expandable graphite market and fine flake size products for battery anode material and other existing and evolving industrial uses for micro carbon products.
Key Bunyu Project Approvals Granted
The Company was also pleased to advise that during the quarter it received confirmation that two key project approvals had been granted for Bunyu. This ensures that all requisite environmental and regulatory approvals have now been accounted for in relation to the respective Stage 1 and 2 developments at Bunyu.
With the development of Bunyu now fully-approved, Volt is well placed to fast-track the start-up of production at the Stage 1 development.
Bunyu Environmental Approvals
In August, the Environmental Impact Assessment (EIA) Certificate for Bunyu was granted by the National Environment Management Council of Tanzania to the Company’s 100%-owned subsidiary Volt Graphite Tanzania (“VGT”).
The EIA certificate represented the final pre-requisite for the granting of Volt’s Mining Licence (granted post-quarter end) and one of the final remaining major milestones in terms of Government permitting for Bunyu.
Volt’s Environmental and Social Impact Study submission was prepared in accordance with the requirements of relevant Tanzanian legislation, including the Environmental Management Act 2004; the Environmental Impact Assessment and Audit Regulations 2005 as well as the Mineral Sector Environmental Impact Assessment Guidelines 2014.
Bunyu Mining Licence Applications Granted
Post-quarter end, Volt was granted two Mining Licences (MLs) ML 591/2018 and ML 592/2018 covering Bunyu’s respective Stage 1 and Stage 2 developments from the Mining Commission of the Ministry of Minerals of Tanzania. The Company formally received the MLs on 22 October 2018.
The granting of the MLsrepresented a major step forward, as the Company focuses on advancing the Bunyu Project towards Stage 1 production.
Volt Receives Bunyu Mining Licences
ASX Announcement 22 October 2018
Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to advise that it has formally received mining licences ML 591/2018 and ML 592/2018 from the Mining Commission of the Ministry of Minerals of Tanzania. As previously advised the two Mining Licences cover the respective Stage 1 and Stage 2 developments of the Bunyu Graphite Project.
The two ML’s cover a combined area of 17.71km2 and provide Volt with the exclusive right to develop the graphite resources in the ML area. The ML’s are effective for a period of 10 years and there is a right of further 10 year renewals under section 53 of the Mining Act.
Now that the Company has formally received the ML’s, the completion of the Tanzanian Note Issue for the Bunyu development is the remaining key milestone prior to Volt’s subsidiary Volt Graphite Tanzania Ltd (VGT) proceeding with front end engineering and design work for the initial Stage 1 operations and the ordering of long lead time components.
Concurrently with the Stage 1 development, VGT plans to be undertaking the Definitive Feasibility Study on the large-scale Stage 2 expansion at Bunyu.
Bunyu Mining Licences Granted
ASX Announcement 18 October 2018
Tanzanian-focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to advise that it has been notified by the Mining Commission of the Ministry of Minerals of Tanzania of the grant of the two Mining Licences covering the respective Stage 1 and Stage 2 developments of the Bunyu Graphite Project.
The Mining Licences (ML’s) have been granted subject to three conditions:
- An acceptance of the boundaries and co-ordinates as per the application as amended;
- Notice by the Company to accept the proposed licence; and
- Payment of US$1,000 in preparation fees for each licence.
Volt advises shareholders that it plans to accept or meet the licence conditions outlined above.
The grant of the mining licences is a major step forward, as the Company focuses on advancing the Bunyu Project towards Stage 1 production and follows the completion of the Stage 1 Feasibility Study (see ASX Announcement dated 31 July 2018) and the finalisation of all required Environmental Approvals (see ASX Announcement dated 4 September 2018).
Bunyu Graphite Project - Accelerated Pathway to Production
As previously advised, Volt’s near-term focus remains firmly on the successful completion of the proposed US$40 million Note Issue, for which an updated Prospectus and accompanying documentation has been lodged with the Tanzanian Capital Markets and Securities Authority (“CMSA”) on 29 September 2018. This process continues to advance in line with previous guidance and further updates will be provided in due course.
Following the formal receipt of the ML’s, the completion of the Tanzanian Note Issue for the Bunyu development and approval by the Volt Board, Volt’s subsidiary Volt Graphite Tanzania Ltd (VGT) will proceed with front end engineering and design work for the initial Stage 1 operations and the ordering of long lead time components.
Concurrently with the Stage 1 development, VGT plans to be undertaking the Definitive Feasibility Study on the large-scale Stage 2 expansion at Bunyu.
Volt’s Chairman, Asimwe Kabunga, commented: “This is a key milestone for Volt and our shareholders, as we have now effectively received all required primary development approvals in relation to our planned Stage 1 and 2 developments at the Bunyu graphite project in Tanzania.
“Volt has maintained a very transparent and positive dialogue with the Tanzanian authorities throughout the entire approvals process, and I would like to thank the relevant authorities for their support and input towards achieving these key approvals.
“The Company looks forward to continuing to work with the Tanzanian authorities over the coming months as we near the start-up of operations from our Stage 1 development.”
ENVIRONMENTAL APPROVAL RECEIVED FOR BUNYU GRAPHITE PROJECT
ASX Announcement 4 September 2018
Tanzanian focused flake graphite development company Volt Resources Limited (ASX: VRC) (“Volt” or “the Company”) is pleased to report the completion of another key milestone in the development of the Bunyu Graphite Project, with the Company’s wholly-owned subsidiary Volt Graphite Tanzania Ltd, having received the Environmental Impact Assessment (EIA) Certificate from the National Environment Management Council of Tanzania (NEMC).
Importantly, the EIA certificate signed by the Honourable Minister of State in Vice President's Office for Union Affairs and Environment Hon. January Makamba, represents the final pre-requisite for the granting of Volt’s Mining Licence (ML) and one of the final remaining major milestones in terms of Government permitting for the Bunyu Graphite Project.
The Bunyu Mining Licence Applications (MLA’s) were submitted to the Minister for Minerals in February 2018 (see ASX release dated 8 February 2018). Recently the Tanzanian Minerals Commission issued revised formats for the Integrity Pledge and Local Content Plan to be submitted with the Company’s MLA’s. These have been completed and lodged with the Commission. Once the EIA certificate is lodged with the Commission the Company expects the two ML’s to be granted soon thereafter.
The Bunyu MLA’s and EIA certificate, along with the previously advised approval of the resettlement compensation under the Resettlement Action Plan (ASX announcement dated 30 April 2018), covers the area required for the Stage 1 development and Stage 2 Expansion Project.
Volt’s Environmental and Social Impact Study submission was prepared in accordance with the requirements of relevant Tanzanian legislation, including the Environmental Management Act 2004; the Environmental Impact Assessment and Audit Regulations 2005 as well as the Mineral Sector Environmental Impact Assessment Guidelines 2014. The requirements and procedures required to obtain mineral rights are stipulated in the Mining Act 2010 with 2017 amendments and the associated Mining Regulations 2018.
Volt’s Chairman, Asimwe Kabunga, commented, “This is a significant milestone in the development of our Bunyu Project, as it transitions the Company a step closer to receiving the all-important Bunyu Mining Licences.
“Volt would like to take this opportunity to thank the local communities and government parties within the Lindi and Mtwara regions, along with the National Environmental Management Council, our Tanzanian specialist consultants Tansheq Limited and their sub-consultants, and our staff for their support, commitment, tenacity and diligence throughout this important process.”
“Looking ahead we remain firmly focused on advancing the Bunyu Project towards Stage 1 production, and we look forward to providing our shareholders with further updates on funding and development progress in the near-term.”
